The Fifth Amendment to the U.S. Constitution includes a deceptively simple requirement: “[N]or shall private property be taken for public use, without just compensation.” Although the same language does not appear in the North Carolina constitution, the state’s highest court has held that Article I, Section 19, of the state constitution, providing that no person shall be “deprived of his life, liberty, or property but by the law of the land,” has the same functional impact as the federal taking clause.
Regulatory Takings
David W. Owens
Gladys Hall Coates Professor of Public Law and Government
School of Government, The University of North Carolina at Chapel Hill
© 2012
Jan. 2012
The compensation requirement is straightforward when the issue is seizing a private residence to quarter troops, as in the early days of the country’s existence, or using private property for a public road, as in modern applications. However, when a landowner alleges in an inverse condemnation suit that land use regulations are so restrictive as to be the equivalent of a seizure or a taking of property, thereby mandating compensation to the owner, the legal issues become rather complex.
Overview of Federal Decisions
The concept that there can be a regulatory taking—that a land use regulation can be so restrictive as to constitute a taking of private property—was first set forth in 1922 in Pennsylvania Coal v. Mahon.[2] The often-quoted conclusion of Justice Holmes in this case was, “while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking.”[3] The U.S. Supreme Court has confirmed that compensation, not just invalidation, is the appropriate remedy when there is a regulatory taking, even if the taking was temporary.[4]
Even modest physical invasions of property require compensation, as the right to exclude others from property is an essential attribute of property. For example, in Loretto v. Teleprompter Manhattan CATV Corp.,[5] the Court held that a regulation requiring an apartment building owner to allow cable television cables to be placed on the roof was a taking, and in Kaiser Aetna v. United States,[6] a requirement that members of the public be allowed access to and use of an upland pond proposed to be connected to navigable waters was held to be a taking.
Regulations that eliminate all economically beneficial uses of a property are also a taking. In Lucas v. South Carolina Coastal Council,[7] the Supreme Court held that in those rare instances where property is rendered worthless by a regulation, a taking has occurred regardless of the fact that a legitimate governmental objective led to the regulation. The Court held that there are only limited exceptions to this rule in “total takings” situations. If the regulation prevents a use that would otherwise be forbidden under the state’s background common law principles of nuisance and property law, there is no taking.
However, determining just when a taking has occurred absent the extraordinary situations of a physical invasion or a total deprivation of value has proven elusive. The courts must examine each challenged regulation on a case-by-case basis to consider the character of the governmental action and the economic impact on the landowner.[8] Justice Brennan summarized the Court’s analytic framework in these situations in Penn Central Transportation Co. v. New York City:
The question of what constitutes a “taking” for purposes of the Fifth Amendment has proved to be a problem of considerable difficulty. While this Court has recognized that the “Fifth Amendment’s guarantee . . . is designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole,” this Court, quite simply, has been unable to develop any “set formula” for determining when “justice and fairness” require that economic injuries caused by public action be compensated by the government rather than remain disproportionately concentrated on a few persons. Indeed, we have frequently observed that whether a particular restriction will be rendered invalid by government’s failure to pay for any losses proximately caused by it depends largely “upon the particular circumstances [in that] case.”
In engaging in these essentially ad hoc, factual inquiries, the Court’s decisions have identified several factors that have particular significance. The economic impact of the regulation on the claimant and, particularly, the extent to which the regulation has interfered with distinct investment-backed expectations are, of course, relevant considerations. So, too, is the character of the governmental action.[9]
Where there is no physical invasion of the property and there is not a total, permanent elimination of the economic value of the property, this Penn Central framework is employed to assess whether a land use regulation constitutes a taking.[10]
When conducting a taking analysis, the property as a whole, not just the regulated portion or the time period of the regulation, must be considered by the court.[11] Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency[12] illustrates this principle as applied to temporal segmentation. The case involved development moratoria imposed on sensitive lands adjacent to Lake Tahoe while studies, planning, and development regulations were being prepared. The Court found that theLucas “valueless” test cannot be applied to the period of the moratorium alone. Consideration of “fairness and justice” is critical, and here a careful analysis of all the factors involved led to a conclusion that there was no taking. While noting that moratoria lasting longer than a year may well warrant special skepticism, the Court concluded that the longer period was justified in this situation. Courts similarly consider the entire parcel to be the “relevant parcel” for a regulatory takings analysis rather than only examining the impacts on a buffer, setback area, or other portion of the property.[13]
It is also important to note that a plaintiff in a regulatory takings challenge must establish that he or she had a property right to undertake the proposed development. Where a rezoning or a discretionary permit (such as a special or conditional use permit) would have been necessary to undertake the development, the owner generally does not have an entitlement to the development and thus no property right that is protected by the Fifth Amendment.[14]
At one time the Court had also stated that a regulation that does not substantially advance a legitimate governmental objective gives rise to a takings as well as a due process claim.[15] However, in Lingle v. Chevron U.S.A., Inc.,[16] the Court held that this is not an appropriate test for a takings claim.
In addition to these standards defining what constitutes an unconstitutional taking, the Supreme Court has emphasized that a takings challenge may not be made before it is ripe. Ripeness requires a final decision with respect to development of the property and a showing that the claimant has exhausted all available procedures for securing compensation prior to bringing the taking suit.[17] This often requires proof that the claimant has unsuccessfully sought a variance or a rezoning, made any available permit appeals, and brought an inverse condemnation action under state law.[18]
North Carolina Application
The regulatory taking issue has not been litigated much in North Carolina state courts. Only a handful of cases have addressed the issue to any substantial degree. Three early decisions illustrate that the courts will uphold substantially restrictive regulations designed to protect public health and safety. In 1875 the state supreme court upheld a Goldsboro ordinance prohibiting wooden buildings and permitted application of the ordinance to a building already under construction,[19] ruling that no damages were due if the building was considered a nuisance because it was a fire hazard. In 1906 that same court upheld a ban on discharges into water supply streams and noted that reasonable regulations to protect the public health, safety, and morals (including restrictions on land use and building) were not a taking.[20] In 1926 this court upheld a Winston-Salem ordinance prohibiting the sale of fresh meat or seafood in any location other than the city market, even when the ordinance was applied to preexisting businesses located elsewhere.[21]
In its first major review of a zoning restriction challenged as an unconstitutional taking, the state high court in 1938 examined a Greensboro setback ordinance involving the height of walls allowed on property lines. In In re Parker,[22] the court found no taking, though the individual project involved might cause no harm and the operation of the ordinance might seriously depreciate the property’s value. The court noted that an individual’s right to use of his or her property was subordinate to the general welfare and “incidental damage to property resulting from governmental activities or laws passed in the promotion of the public welfare is not considered a taking of the property for which compensation must be made.”[23]
The N.C. Supreme Court elaborated on this point in a challenge to a Charlotte zoning requirement prohibiting a restaurant in a residential zoning district. Justice Sam Ervin wrote that “[i]f the police power is properly exercised in the zoning of a municipality, a resultant pecuniary loss to a property owner is a misfortune which he must suffer as a member of society.”[24]In 1954 this court confirmed that a change in zoning did not in and of itself give rise to a claim for compensation by landowners whose property values were affected by the change.[25]
Helms v. City of Charlotte[26] is as close as North Carolina courts have come to finding a taking in a zoning case. Helms involved two very small lots along a creek that had been rezoned from an industrial district to an exclusively residential district. The court held that reduction in value alone did not constitute a taking: “The mere fact that a zoning ordinance seriously depreciates the value of the complainant’s property is not enough, standing alone, to establish its invalidity.”[27] The court also held, however, that to avoid a taking claim, the ordinance must not preclude all practical use of the land, thereby rendering the property “valueless.” In this instance the court was clearly concerned that the city was not allowing the business or commercial use of the lots for which they were suited but had limited use to a residence; there was no evidence on the record that a small “shotgun” residence on this particular site could be sold for more than its construction cost. The court remanded the case for findings on whether the ordinance left any reasonable and practical use of the lot.[28]
The supreme court upheld Asheville’s floodplain zoning ordinance in Responsible Citizens v. City of Asheville.[29] The test articulated there for a taking analysis was (1) whether the ends sought to be achieved were within the police power and (2) whether the means by which they were obtained were reasonable. Protecting public safety was held to be a permissible objective, and preventing floodway obstructions and requiring flood-proofing were held to be reasonable means of accomplishing this.
In Finch v. City of Durham,[30] the supreme court examined the taking issue in the context of reviewing a “down zoning” and reaffirmed the basic test for a taking: there is no taking unless the owner is deprived of practical use of the property and the property is rendered of no reasonable value. Deprivation of previously held development rights[31] and diminution of value do not in and of themselves constitute a taking. The Finch court noted that the plaintiffs had exercised an option to purchase in the knowledge that the planning board had recommended a rezoning, in essence taking a speculative risk that the rezoning would fail. The court found that the ordinance had a reasonable nexus to the legitimate public objective of maintaining the integrity of the adjacent single-family residential neighborhood, that alternative rezonings such as clustered residential had been proposed by the city but not pursued by the owner, and that the property in any event retained practical use and reasonable value.[32]
North Carolina’s highest court again confirmed that a diminution in value resulting from a rezoning is not compensable inMesser v. Town of Chapel Hill.[33] In this case the plaintiffs had challenged as a taking a 150-acre rezoning to a residential zoning district that required 5-acre minimum lot sizes. While their appeal was pending, the property was sold for $1.5 million. The court dismissed the takings challenge, noting that the sale “establishes beyond peradventure that the property continued to have ‘a practical use and a reasonable value’ following the amendment to the zoning ordinance.”[34] Likewise, in Williams v. Town of Spencer,[35] the state appellate court upheld an ordinance provision that did not allow vacated lots in a mobile home park to be reoccupied by replacement manufactured housing units. The court ruled that there was no unconstitutional taking because the ordinance allowed the land occupied by the nonconforming mobile home park to be used for any of the uses allowed in an industrial zone. In JWL Investments, Inc. v. Guilford County Board of Adjustment,[36] the appeals court rejected a claim that residential zoning with a scenic corridor overlay was a taking, noting that the regulations did not deprive the owner of all economically beneficial or productive uses.
A federal court likewise held that a zoning amendment that results in a diminution of value does not in and of itself constitute an unconstitutional taking in Adams v. Village of Wesley Chapel.[37] The plaintiffs there acquired a 184-acre tract in Union County in 1964 for $56,500. After the area was annexed into Wesley Chapel, the town zoning reduced the maximum residential density, resulting in thirty-five fewer potential lots on the property. Although the plaintiff sold the land in 2004 for $3.7 million, it was alleged that the zoning amendment had reduced the property’s value by $1.59 million. The court applied the Penn Central balancing test, noting that the plaintiffs could make a reasonable return on their investment, just not as much as they hoped, and that the character of the governmental action was “garden-variety zoning” intended to control growth, preserve a small-town atmosphere, and maintain a low tax rate, all legitimate governmental objectives. The takings claim was therefore dismissed.
Cases challenging the application of other land use regulations have produced similar results in the court of appeals. In Weeks v. North Carolina Department of Natural Resources & Community Development,[38] the court held that a limitation of permissible pier length does not deprive a riparian owner of all reasonable use of property and is thus not a taking. King v. State[39] involved the denial of state permits to the plaintiff, who wanted to place fill in wetlands in order to build a road and subdivide an 8-acre peninsula in Topsail Sound. The court held that the denial was not a taking because the state had established that practical development alternatives existed.[40] Likewise, in Guilford County Department of Emergency Services v. Seaboard Chemical Corp.,[41] the court held that denial of a special use permit for a hazardous waste facility in a watershed area was not a taking because many other uses of the site were permissible.[42] In Shell Island Homeowners Ass’n, Inc. v. Tomlinson,[43] the court rejected a takings challenge to state regulations prohibiting permanent oceanfront erosion control structures, holding there was no property right to construct such structures. Further, the court noted that in any event the plaintiff was aware of this regulatory limitation prior to acquiring title or constructing the threatened hotel and condominium structure, and this prior knowledge foreclosed a taking or inverse condemnation claim.[44]
Exactions
In addition to statutory authority for their imposition, exactions are further limited by the Takings Clause. Exactions are the mandated dedications of land, construction of facilities, or payments of funds needed to address adverse public effects of development that are imposed as a condition of development approval. States traditionally imposed several different standards for how close the relationship between the exactions and the impacts of the proposed development must be. The strictest test, once applied by a minority of states, is that the impacts be uniquely and specifically attributable to the development.[45] On the other end of the spectrum, several states held that any rational relationship between the development’s impacts and the exaction would suffice.[46] A majority of states used an intermediate “rational nexus” or “reasonable relationship” test.[47]
The U.S. Supreme Court addressed the question of exactions as takings in two cases. In Nollan v. California Coastal Commission,[48] the Court held that the exactions required are limited to those rationally related to impacts or needs generated by the proposed development. For example, if a development creates the need for streets, utilities, and recreational space, it is not a taking to require that the developer bear the burden of providing them.[49] In Dolan v. City of Tigard,[50] the Court held that a mandatory exaction must not be any greater than that which is “roughly proportional” to address the impacts of the permitted development.
The proportionality standard only applies in cases involving exactions, not to regulatory takings claims.[51] Also, several courts have held that any agreement to provide land, construct facilities, or pay fees that is voluntarily entered into in good faith and with consideration cannot be subsequently challenged as an unconstitutional taking.[52]
[1] See, e.g., Carolina Beach Fishing Pier, Inc. v. Town of Carolina Beach, 274 N.C. 362, 163 S.E.2d 363 (1968); DeBruhl v. State Highway & Pub. Works Comm’n, 247 N.C. 671, 102 S.E.2d 229 (1958).
[2] 260 U.S. 393 (1922). See also Dellinger v. City of Charlotte, 114 N.C. App. 146, 441 S.E.2d 626 (1994), review granted, 336 N.C. 603, 447 S.E.2d 388, dismissed, review improvidently granted, 340 N.C. 105, 455 S.E.2d 159 (1995). The U.S. Supreme Court has long ruled that land use regulations preventing noxious land uses and uses that are nuisances or threats to public health and safety are not takings, even if property values are substantially reduced. Goldblatt v. Hempstead, 369 U.S. 590 (1962) (restricting quarry excavation even though preexisting mine was thereby rendered useless); Miller v. Schoene, 276 U.S. 272 (1928) (requiring destruction of diseased ornamental trees to protect apple orchards on other property); Euclid v. Ambler Realty Co., 272 U.S. 365 (1926) (limiting property to residential uses even though a 75 percent reduction in property value resulted); Pierce Oil Corp. v. City of Hope, 248 U.S. 498 (1919) (requiring removal of preexisting oil storage tanks near residences even though it rendered existing business impractical); Hadacheck v. Sebastian, 239 U.S. 394 (1915) (requiring preexisting use mining clay and manufacturing bricks to be closed even though property value was reduced by more than 90 percent); Reinman v. City of Little Rock, 237 U.S. 171 (1915) (requiring preexisting livery stable to be closed when city expanded around it); Murphy v. California, 225 U.S. 623 (1912) (outlawing use of property for billiard hall); Mugler v. Kansas, 123 U.S. 623 (1887) (outlawing use of preexisting brewery equipment lawfully in use before prohibition).
[3] Mahon, 260 U.S. at 415.
[4] First English Evangelical Lutheran Church v. L.A. Cnty., 482 U.S. 304 (1987).
[5] 458 U.S. 419 (1982). The Court refused to extend this physical invasion takings rule to a statute restricting mobile home park rents and the park owner’s ability to evict upon a transfer of mobile home ownership. Yee v. Escondido, 503 U.S. 519 (1992). See also Stop the Beach Renourishment, Inc. v. Fla. Dep’t of Envtl. Prot., ___ U.S. ___, 130 S. Ct. 2592, 177 L. Ed. 2d 184 (2010) (where state property law provides that avulsion does not change property lines, setting fixed property line prior to artificial beach nourishment is not a taking).
[6] 444 U.S. 164 (1979).
[7] 505 U.S. 1003 (1992). On remand, the S.C. Supreme Court held that prohibiting construction of a habitable structure on the lot was not justified under state common law and that, therefore, the permit denial was a temporary regulatory taking. 309 S.C. 424, 424 S.E.2d 484 (1992). The state later acquired the lot for $1.5 million then resold it to developers. In theLucas context, consideration of investment-backed expectations is not required. Palm Beach Isles Assocs. v. United States, 213 F.3d 1354 (Fed. Cir. 2000). In cases where the regulation leaves even a modest residual value in the land, courts have generally declined to apply the Lucas categorical taking rule. See, e.g., Cooley v. United States, 324 F.3d 1297 (Fed. Cir. 2003) (wetland regulation that reduced value by 98.8 percent not a categorical taking).
[8] Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470 (1987); Agins v. City of Tiburon, 447 U.S. 255 (1980); Penn Cent. Transp. Co. v. N.Y. City, 438 U.S. 104 (1978).
[9].438 U.S. 104, 123–24 (citations omitted). See Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), and Palazzolo v. Rhode Island, 533 U.S. 606 (2001), for discussion of what constitutes a reasonable investment-backed expectation.
[10] See, e.g., Palazzolo v. Rhode Island, 533 U.S. 606 (2001). The case involved a denial of a proposed bulkhead and the filling of eleven acres of coastal marshland. The Court held that the fact that Palazzolo took title to the property from the partnership after the effective date of the state rules prohibiting wetland fill did not automatically prevent him from having a reasonable investment-backed expectation regarding use of the property (though the existence of the regulations at the time of acquisition is one factor to consider in determining the reasonableness of development expectations). The Court found that since the owner had the right to build at least one residence on the upland portion of the property and this had an undisputed value of at least $200,000, there was no total deprivation of the economic value of the property and thus no automatic taking under the Lucas test.
[11] Concrete Pipe & Prods. v. Constr. Laborers Pension Trust, 508 U.S. 602 (1993); Machipongo Land & Coal Co. v. Commonwealth, 569 Pa. 3, 799 A.2d 751 (2002). See also Threatt v. Fulton Cnty., 266 Ga. 466, 471, 467 S.E.2d 546, 550 (1996) (requirement of 50-foot vegetated buffer along streams not a taking absent a showing that owners have been deprived of economically viable or beneficial use of entire parcel); City of Annapolis v. Waterman, 357 Md. 484, 525–32, 745 A.2d 1000, 1022–25 (2000) (must consider entire tract when assessing regulatory taking implications of recreational space requirement in subdivision approval); Giovanella v. Conservation Comm’n of Ashland, 447 Mass. 720, 725–34, 857 N.E.2d 451, 456–61 (2006) (rebuttable presumption to include commonly-owned contiguous property in takings analysis, subject to fact-sensitive analysis); Quirk v. Town of New Boston, 140 N.H. 124, 131, 663 A.2d 1328, 1332–33 (1995) (requirement of 200-foot buffer at boundary of campground not a taking as impact on entire parcel must be considered); Zealy v. City of Waukesha, 201 Wis. 2d 365, 374–79, 548 N.W.2d 528, 532–34 (Wis. 1996) (must consider contiguous upland portion of parcel when assessing regulatory taking implications of zoning ordinance wetland conservancy requirements).
[12] 535 U.S. 302 (2002).
[13] See, e.g., Blair v. Dep’t of Conservation & Recreation, 457 Mass. 634, 932 N.E.2d 267 (2010) (regulation of 200-foot buffer adjacent to water supply watershed must be reviewed in terms of impact on entire parcel, not buffer area alone).
[14] See, e.g., Henry v. Jefferson Cnty., 637 F.3d 269 (4th Cir. 2011) (as owner had no entitlement to a conditional use permit for higher-density development, there was no deprivation of a property right and no taking). See also Sunrise Corp. of Myrtle Beach v. City of Myrtle Beach, 420 F.3d 322, 330 (4th Cir. 2005) (takings analysis begins with an identification of governmental interference with an actual property right).
[15] Agins v. City of Tiburon, 447 U.S. 255 (1980).
[16] 544 U.S. 528 (2005) (case involved challenge to Hawaii law limiting the rent that oil companies could charge dealers leasing company-owned service stations).
[17] Williamson Cnty. Reg’l Planning Comm’n v. Hamilton Bank of Johnson City, 473 U.S. 172 (1985).
[18] See, e.g., Fourth Quarter Props. IV, Inc. v. City of Concord, No. 1:02CV00908, 2004 WL 231303 (M.D.N.C. Jan. 22, 2004),aff’d, 127 F. App’x 648 (4th Cir. 2005) (takings claim based on alleged misapplication of zoning restrictions in airport buffer not ripe).
[19] Privett v. Whitaker, 73 N.C. 554 (1875).
[20] Durham v. Eno Cotton Mills, 141 N.C. 615, 54 S.E. 453 (1906).
[21] Angelo v. Winston-Salem, 193 N.C. 207, 136 S.E. 489, aff’d, 274 U.S. 725 (1927).
[22] 214 N.C. 51, 197 S.E. 706, appeal dismissed sub nom. Parker v. City of Greensboro, 305 U.S. 568 (1938). In addition to being raised when zoning affects property values, the taking issue is raised when zoning or subdivision ordinances require dedication of land for roads, parks, utilities, or open space. In River Birch Associates v. City of Raleigh, 326 N.C. 100, 388 S.E.2d 538 (1990), the court ruled that the required conveyance of open space was not a taking because it was reasonably related to the valid purpose of preserving urban open space within a portion of the approved development.
[23] In re Parker, 214 N.C. at 57, 197 S.E. at 710.
[24] Kinney v. Sutton, 230 N.C. 404, 411–12, 53 S.E.2d 306, 311 (1949).
[25] McKinney v. City of High Point, 239 N.C. 232, 79 S.E.2d 730 (1954). The court reached the same conclusion in a case challenging restrictions on signs in Charlotte’s zoning ordinance. Schloss v. Jamison, 262 N.C. 108, 136 S.E.2d 691 (1964). Cases nationally support the proposition that a regulation reducing profits at a site is not a taking. See, e.g., McCrothers Corp. v. City of Mandan, 2007 ND 28, 728 N.W.2d 124 (adult entertainment restrictions that result in drop of earnings at an adult establishment are not a taking).
[26] 255 N.C. 647, 122 S.E.2d 817 (1961).
[27] Id. at 651, 122 S.E.2d at 820.
[28] In another taking case, Roberson’s Beverages, Inc. v. City of New Bern, 6 N.C. App. 632, 171 S.E.2d 4 (1969), cert. denied, 276 N.C. 183 (1970), the court reviewed a challenge to New Bern’s rezoning of a site previously used as a bottling plant (and as a warehouse for nine years) from a business- commercial zone to an office-institutional zone. The court held that depreciation of value did not render a rezoning a taking or otherwise unconstitutional. Because there was no showing that the building could not be converted to a permissible use, that it could not be razed and the property converted to a permissible use, or that the nonconforming warehouse use could not be continued, the rezoning was upheld. See also Blades v. City of Raleigh, 280 N.C. 531, 187 S.E.2d 35 (1972); Michael v. Guilford Cnty., 269 N.C. 515, 153 S.E.2d 106 (1967).
[29] 308 N.C. 255, 302 S.E.2d 204 (1983). The court also held that regulating lands within the hazard zone, but not those outside it, did not violate the Equal Protection Clause because the distinction was a reasonable classification bearing a rational relationship to a permissible state objective.
[30] 325 N.C. 352, 384 S.E.2d 8 (1989). This litigation involved the city’s rezoning of a 2.6-acre undeveloped parcel adjacent to I-85 from an office-institutional zone to a residential one. The plaintiffs contended that the rezoning reduced the value of the property from $550,000 (if used for a proposed motel) to $20,000 (if used as one single-family lot). The city contended that other valuable uses were available, including use as a church or a day care site or additional single-family lots. The jury concluded that there had been a taking but that the plaintiffs had suffered no damages. The trial court then granted a judgment notwithstanding the verdict as to damages, invalidated the rezoning, and awarded $150,937 in damages.
[31] Plaintiffs must establish that they in fact have a protected property right. In Adams Outdoor Advertising of Charlotte v. North Carolina Department of Transportation (DOT), 112 N.C. App. 120, 434 S.E.2d 666 (1993), the plaintiff contended that DOT’s planting of trees in the state right-of-way as part of a highway beautification project obscured the visibility of eleven of its billboards and was a compensable taking under the state’s inverse condemnation statute. The state appeals court dismissed the complaint, finding no basis for a claim of a “right to be seen.” In Shell Island Homeowners Ass’n, Inc. v. Tomlinson, 134 N.C. App. 217, 517 S.E.2d 406 (1999), the same court held that there was no property right to protect oceanfront property from erosion with permanent hardened structures (such as bulkheads), so denial of permits to build such could not be a taking.
[32] Three dissenting members of the court concluded that although the use and the value of the property after the rezoning were not such as to constitute a taking as a matter of law, they were adequate to support a jury’s finding of a taking. Finch, 325 N.C. at 376–89, 384 S.E.2d at 21–29 (entirety of dissents). Courts in other states have applied the Penn Central analysis to uphold regulations that significantly reduce but do not totally eliminate the value of property. See, e.g., Animas Valley Sand & Gravel, Inc. v. Bd. of Comm’rs, 38 P.3d 59 (Colo. 2001).
[33] 346 N.C. 259, 485 S.E.2d 269 (1997).
[34] Id. at 261, 485 S.E.2d at 270 (citations to Finch omitted).
[35] 129 N.C. App. 828, 500 S.E.2d 473 (1998).
[36] 133 N.C. App. 426, 515 S.E.2d 715 (1999), review denied, 251 N.C. 715, 540 S.E.2d 349 (2000).
[37] 259 F. App’x 545 (4th Cir. 2007).
[38] 97 N.C. App. 215, 224–26, 388 S.E.2d 228, 233–35, review denied, 326 N.C. 601, 393 S.E.2d 890 (1990).
[39] 125 N.C. App. 379, 481 S.E.2d 330, review denied, 346 N.C. 280, 487 S.E.2d 548 (1997).
[40] The court concluded that the Lucas test for a taking—a deprivation of all economically beneficial or productive use of the property—was similar to the Finch standard of determining whether the property was left with a practical use and a reasonable value. King, 125 N.C. App. at 386, 481 S.E.2d at 334.
[41] 114 N.C. App. 1, 441 S.E.2d 177, review denied, 336 N.C. 604, 447 S.E.2d 390 (1994).
[42] The court also held that the cost of cleaning up previous contamination at the site was not to be a factor in determining whether practical uses of the site remained, as that cost would be incurred regardless of the disposition of the special use permit.
[43] 134 N.C. App. 217, 517 S.E.2d 406 (1999).
[44] The court cited the holding in Lucas that there is no taking if a logical antecedent inquiry into the nature of the owner’s estate would reveal that the proscribed uses were not part of his title to begin with. Lucas, 505 U.S. 1003, 1027 (1992). See also Bryant v. Hogarth, 127 N.C. App. 79, 488 S.E.2d 269, review denied, 347 N.C. 396, 494 S.E.2d 406 (1997) (fisheries regulation prohibiting mechanical harvesting in primary nursery area not a taking of exclusive franchise to harvest shellfish in that area where rule was in place prior to issuance of franchise); Adams Outdoor Adver. of Charlotte v. N.C. Dep’t of Transp., 112 N.C. App. 120, 434 S.E.2d 666 (1993) (adoption of statute authorizing planting of trees and shrubs within right-of-way prior to issuance of billboard permit precludes takings claim based on such vegetation blocking motorists’ views of billboards).
[45] The leading case espousing this test was Pioneer Trust & Savings Bank v. Village of Mount Prospect, 22 Ill. 2d 375, 176 N.E.2d 799 (1961) (invalidating requirement of dedication of one acre for parks and schools for each sixty residential lots).
[46] See, e.g., Associated Home Builders v. City of Walnut Creek, 4 Cal. 3d 633, 94 Cal. Rptr. 630, 484 P.2d 606 (1971); Jenad, Inc. v. Vill. of Scarsdale, 18 N.Y.2d 78, 271 N.Y.S.2d 955, 218 N.E.2d 673 (1966).
[47] The leading case espousing this view was Jordan v. Village of Menomonee Falls, 28 Wis. 2d 608, 137 N.W.2d 442 (1965).
[48]. 483 U.S. 825 (1987). See also Franklin Rd. Props. v. City of Raleigh, 94 N.C. App. 731, 381 S.E.2d 487 (1989).
[49] River Birch Assocs. v. City of Raleigh, 326 N.C. 100, 122, 388 S.E.2d 538, 551 (1990); Town of Pinebluff v. Marts, 195 N.C. App. 659, 667–68, 673 S.E.2d 740, 745–46 (2009).
[50] 512 U.S. 374 (1994).
[51] Lingle v. Chevron U.S.A., Inc., 544 U.S. 528 (2005); City of Monterey v. Del Monte Dunes at Monterey, Ltd., 526 U.S. 687, 702 (1999); McClung v. City of Sumner, 545 F.3d 803, modified, 548 F.3d 1219 (9th Cir. 2008) (Nollan and Dolanstandards not applied to generally applicable development condition requiring installation of stormwater pipes).
[52] McClung v. City of Sumner, 545 F.3d 803, modified, 548 F.3d 1219 (9th Cir. 2008) (developer who voluntarily installed an oversized stormwater pipe in return for a waiver of certain fees cannot challenge the condition as a taking); Leroy Land Dev. Corp. v. Tahoe Reg’l Planning Agency, 939 F.2d 696, 698 (9th Cir. 1991) (developer who agreed to off-site mitigation measures cannot challenge agreed-upon condition as a taking); Xenia Rural Water Ass’n v. Dallas Cnty., 445 N.W.2d 785 (Iowa 1989) (setback requirement negotiated by the parties is not a taking); Rischon Dev. Corp. v. City of Kellor, 242 S.W.3d 161 (Tex. App. 2007) (developer cannot challenge development agreement provision as a taking). But see Toll Bros., Inc. v. Bd. of Chosen Freeholders, 194 N.J. 223, 944 A.2d 1 (2008) (statutory limits on exactions apply to development agreements).
